Understanding the Impact: The 20% Import Tax on Purchases Up to $50

 

Discover the recent introduction of a 20% tax on imports up to $50, bringing relief for local retailers and opening up growth opportunities for entrepreneurs.

In recent years, discussions surrounding the taxation of international purchases under $50 have been prominent among retailers and entrepreneurs alike. Recently, the House of Representatives passed a bill endorsing a 20% tax on such transactions, a decision expected to have a positive impact on the national retail sector. But what does this change mean for entrepreneurs, and how can it be leveraged to drive business growth? Let’s explore further.

 

Learn more about: What are the perspectives and trends of foreign trade in 2024?

 

Bill 914/24: green mobility and import taxation

 

The inclusion of a tax on international purchases under $50 is part of Bill (PL) 914/24, which moved to the Senate following approval by the House of Representatives. Initially focused on the Green Mobility and Innovation Program (Mover), aimed at advancing technologies for low-emission vehicle production, the bill also introduced the provision for taxing international purchases.

Upon reaching the Senate, Senator Jaques Wagner (PT-BA), the Government leader, called for urgent processing of the bill, expediting the voting process. The House President pledged consultation with party leaders to determine the bill’s urgency status.

 

Learn more about: Impostos can be obstacles for foreign companies in Brazil

 

Implications of the new tax rate

 

The approved measure specifies a 20% Import Tax (II) on international purchases up to $50. Such transactions are common on foreign retail platforms, particularly those from Southeast Asia, such as Shopee, AliExpress, and Shein. These platforms act as marketplaces, featuring a wide range of third-party products, often at lower prices than Brazilian manufacturers.

The tax addressed by the bill is federal, with purchases under the $50 limit also subject to a 17% Goods and Services Tax (ICMS), a state levy. As a result, a consumer purchasing a $100 product (including shipping and insurance) would be liable for both the Import Tax rate and ICMS, increasing the final cost to $140.40.

As outlined in the bill, charges exceeding $50 and up to $3,000 will incur a 60% rate, with a $20 (approximately R$100) discount applicable to the tax payable.

 

Learn more about: Do you know how taxation works for the importation of services?

 

Facilitating foreign businesses with import support

 

At CLM Controller, we understand the challenges associated with importing goods, especially for foreign entities entering the Brazilian market. Therefore, we provide tailored support to international businesses looking to import into Brazil. From navigating complex customs regulations to optimizing supply chain logistics, our team of experts is dedicated to ensuring a smooth import process. With our guidance, foreign companies can confidently expand their presence in Brazil’s dynamic market, unlocking new growth opportunities and optimizing success.

 

Learn more about: How to Have an Efficient Importation?

 

Conclusion

 

The introduction of a 20% tax on imports up to $50 brings relief for local retailers and a range of growth opportunities for entrepreneurs. By capitalizing on this change, businesses can enhance competitiveness, drive expansion, and strengthen the local economy. Prepare your business, refine your strategies, and embrace the opportunities offered by this new era in national commerce.

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